Nestled at the end of the article is the following quote, coming from survey data
But there’s also the power trip. Remarkably, a recent survey of company execs revealed that most mandated returns to the office were based on something as ironclad as “gut feeling,” and that 80 percent actually regret ever making the decision.
I think the reality is that like most policy decisions at a workplace, they are based on nothing. They simply are drawn from how the people at the top feel like an organization should be or because that’s simply how these decision makers are used to (or comfortable with) doing things.
I truly think it’s just the corporate real estate thing. Those 80% that regret return to office are CEOs that weighed the loss from real estate contracts against the blowback from forcing employees back to office, and they are saying that they feel they made the wrong decision.
I might argue this statistic also shows that 80% of CEOs underestimate the value of their employees. Not exactly a hot take in 2023, but it’s fun to put a number to it.
Unless your or the company’s portfolio has lots of commercial real estate securites. The commercial real estate and the financial securities behind them are in a bubble and there is a fear it could pop like it was 2007 with the mortgage securities. That was the fear behind it. And many cities had mayors pushing for a return to office because the downtowns were threatened.
Most of this comes from the C-level execs being “inbred.” Meaning many C-level execs sit as board members on other companies. These guys are all trying to scratch each others’ backs.
If you have an unutilized asset, there’s pressure to get rid of it for the cost savings.
If you sell your asset at a loss, it looks bad for you and the company. Same for paying cancelation fees.
If you legitimately think that you’re going to need that space in the future, for example because you think that we’ll find an equilibrium between “everyone work from office” and where we are now, and that we’re trending towards an organic level of office need/desire higher than we’re at now, you might see selling now as the first step to needing to buy again later, likely for higher than you sold for. So you try to “mandate” the equilibrium that you expect so you’re not in a position to have to explain why you’re holding onto a dead and losing value property.
Executives spend a lot of time talking to people and having meetings. The job selects for people who thrive on and value face to face communication. Naturally, they overestimate how much that social aspect of the job is true for everyone else, so they estimate that the equilibrium will have a lot more office time than other people would.
To make it worse, the more power you have to influence that decision, the more likely you are to have a similar bias.
This isn’t an excuse of course, since you can overcome that bias simply by telling teams to discuss what their ideal working arrangement would be, and then running a survey. Now you have data, and you can use it to try to scale offices to what you actually want.
Nestled at the end of the article is the following quote, coming from survey data
I think the reality is that like most policy decisions at a workplace, they are based on nothing. They simply are drawn from how the people at the top feel like an organization should be or because that’s simply how these decision makers are used to (or comfortable with) doing things.
I truly think it’s just the corporate real estate thing. Those 80% that regret return to office are CEOs that weighed the loss from real estate contracts against the blowback from forcing employees back to office, and they are saying that they feel they made the wrong decision.
I might argue this statistic also shows that 80% of CEOs underestimate the value of their employees. Not exactly a hot take in 2023, but it’s fun to put a number to it.
I dont understand this real estate thing. Cancelling contracts or having empty space is still cheaper than everyone back in the office.
More people in the office means more maintenance, more snacks, more hvac needs, etc.
Unless your or the company’s portfolio has lots of commercial real estate securites. The commercial real estate and the financial securities behind them are in a bubble and there is a fear it could pop like it was 2007 with the mortgage securities. That was the fear behind it. And many cities had mayors pushing for a return to office because the downtowns were threatened.
Most of this comes from the C-level execs being “inbred.” Meaning many C-level execs sit as board members on other companies. These guys are all trying to scratch each others’ backs.
…with affordable housing. The horror!
If you have an unutilized asset, there’s pressure to get rid of it for the cost savings.
If you sell your asset at a loss, it looks bad for you and the company. Same for paying cancelation fees.
If you legitimately think that you’re going to need that space in the future, for example because you think that we’ll find an equilibrium between “everyone work from office” and where we are now, and that we’re trending towards an organic level of office need/desire higher than we’re at now, you might see selling now as the first step to needing to buy again later, likely for higher than you sold for. So you try to “mandate” the equilibrium that you expect so you’re not in a position to have to explain why you’re holding onto a dead and losing value property.
Executives spend a lot of time talking to people and having meetings. The job selects for people who thrive on and value face to face communication. Naturally, they overestimate how much that social aspect of the job is true for everyone else, so they estimate that the equilibrium will have a lot more office time than other people would.
To make it worse, the more power you have to influence that decision, the more likely you are to have a similar bias.
This isn’t an excuse of course, since you can overcome that bias simply by telling teams to discuss what their ideal working arrangement would be, and then running a survey. Now you have data, and you can use it to try to scale offices to what you actually want.